The first-mover advantage teaches us that the first player in a market often has a massive advantage thanks to underdeveloped competition and a rapidly growing market. However, I think the first-mover advantage is actually extremely overrated.
First of all, the first-mover advantage has little to do with actually being first. To benefit from the first-mover advantage, you have to enter the market when it's growing exponentially and the technology can support the growth. Trying to enter before this will often just make the endeavor even harder, not easier.
Similarly, it's very difficult to know when the first-mover advantage is truly over, and in many cases, it never ends due to endless innovation. Finally, people often completely forget about the successor advantage when they get hung up on the first-mover advantage.
Successors often have a far greater chance at success and many of the biggest companies in the world today are successors like Google, Facebook, Toyota, Volkswagen, Tesla, and Airbus.
This video explains the problems with the first-mover advantage that are usually overlooked and why the first-mover advantage is largely a myth.
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